Types of Business Financing
Last updated: July 2026
Business financing generally falls into seven types: revenue advances, term loans, lines of credit, SBA loans, equipment financing, bridge loans, and invoice factoring. They differ mainly in how fast the money arrives, how it is repaid, and what the lender wants to see first. The right one depends less on your credit score than on what you are funding and how the cash comes back.
Below is a side-by-side comparison of all seven, then the same products organized by what you are trying to do and by industry. If you would rather talk it through than read it, that is what we are here for.
What are the main types of business financing?
Every option below fits a different situation. Here is how they compare at a glance, then we help you pick the right one.
| Financing type | Best for | Typical amount | Speed to fund | Repayment | Cost structure |
|---|---|---|---|---|---|
| Revenue advance | Fast cash when you have steady sales | Scaled to your monthly revenue | Often a few business days | A set share of your daily or weekly sales | Factor rate (a fixed total cost), typically higher |
| Business term loan | A defined, one-time purchase | Broad range by lender and profile | A few days to a few weeks | Fixed payments over a set term | Interest rate over the term |
| Business line of credit | Recurring or unpredictable cash needs | A revolving credit limit | Varies by lender | Interest only on what you draw | Interest on the drawn balance, plus possible fees |
| SBA loan | Long-term needs at the lowest ongoing cost, when you can plan a few weeks ahead | Up to $5M on the 7(a) program | Often several weeks | Long terms (up to 10 years working capital, up to 25 years real estate) | Base rate plus a lender spread, typically lower |
| Equipment financing | Buying equipment or machinery | Tied to the equipment value | A few days to a few weeks | Fixed payments over a set term | Interest, with the equipment as collateral |
| Bridge loan | A short-term gap with a clear, defined payoff coming | Varies by exit strength and collateral | Often a few business days | Short term, repaid when your expected funds arrive | Higher, priced for speed and a short horizon |
| Invoice factoring | Unlocking cash from unpaid invoices | Tied to your outstanding receivables | Often a few business days | Settled when your customer pays the invoice | A factoring fee on the invoice value |
Not sure which fits? That is what we do. Start a conversation and we will find the right fit for your business.
Customizable Capital
Options tailored to minimize your cost of capital depending on how you plan to use it. Amounts up to $5M within two business days.
IP-Backed Financing
Leverage your intellectual property valuation to name your terms with private lenders interested in fueling your growth.
Exit Your Business
Partner with buyers who prioritize preserving your legacy and ensuring long-lasting success. Closing within 60 days.
Asset-Based Lending
Use real estate, equipment, or other owned assets to pursue longer amortization and interest-only payment options.
Small Business Loans
A plain-language starting point if you are not sure which product you need. Covers what small business lending actually looks like, what it is used for, and what to have ready.
Which type of financing is right for my business?
Start with three questions, in this order.
- What is the money for? A one-time purchase with a clear payback, like a machine or a build-out, suits a term loan or equipment financing. A recurring or unpredictable gap, like payroll timing or seasonal inventory, suits a line of credit or a revenue advance. Money that is already yours but stuck in unpaid invoices suits factoring.
- How fast do you need it? Speed and cost move in opposite directions. SBA loans are usually the lowest ongoing cost and the longest process. Revenue advances and factoring are usually the fastest and cost more. Term loans and lines of credit sit between the two.
- How does the cash come back? If your revenue is steady, fixed monthly payments are fine. If it swings by season or by contract, a structure that flexes with your deposits will be easier to carry than a fixed payment you have to make in a slow month.
If two of those three answers point at different products, that is normal, and it is the conversation worth having before you apply anywhere. Applying to several places at once to see what sticks is the most expensive way to shop for capital.
How do I choose between a loan and a line of credit?
A term loan is a lump sum you take once and repay on a schedule. A line of credit is a limit you can draw against, repay, and draw against again.
Pick a term loan when you know the amount and the purpose up front, and the purchase has a payback you can point to. You pay interest on the whole balance from day one, which is fine when the whole balance is doing work.
Pick a line of credit when the need is recurring or the timing is uncertain. You generally pay only for what you draw, so an unused line costs little to keep. The trade-off is that limits are usually smaller than a term loan for the same business, and lines can be reviewed or reduced.
Plenty of businesses end up with both: a term loan for the asset, a line for the timing.
See our term loan and business line of credit pages, or the full comparison in revenue advance vs term loan vs line of credit.
What does business financing cost?
Cost is not one number, and comparing an interest rate to a factor rate will mislead you. Term loans and SBA loans price as an annual interest rate. Revenue advances price as a factor rate, a fixed total you repay regardless of how quickly you pay it. Factoring prices as a discount on each invoice. Equipment financing prices as a rate over the life of the asset.
The only way to compare fairly is total dollars out over the actual time you hold the money, plus any fees. We walk through that arithmetic on what business financing actually costs.
We do not quote a rate before we have seen your documents. Anyone who does is guessing, and the guess is rarely in your favor.
How fast can I get funded?
It depends on the product, not on how urgently you need it. Revenue advances and factoring are typically the fastest, often within a business day or two of a complete file. Equipment financing and lines of credit typically take several days. Term loans take longer. SBA loans are measured in weeks to months.
The variable you actually control is document readiness. A complete file moves; an incomplete one waits. Full breakdown in how fast can a business get funded, and the paperwork list in business loan requirements.
Financing by what you are trying to do
Financing by industry
Common questions
Not sure which one fits?
That is the normal starting point, and it is the conversation we would rather have than a rushed application. Tell us what you are funding and what your revenue looks like, and we will tell you which products are realistic, including when the honest answer is that now is not the time.